A Rising Tide Lifts All Budgets

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WASHINGTON, D.C.: Thanks to the surging U.S. economy, White House and Congressional Republican negotiators are close to a deal to balance the budget by 2002. Better-than-expected tax receipts meant that the Treasury Department had enough surplus cash to pay off $65 billion of the federal debt in the current fiscal quarter, easing the need to implement deep budget cuts. "Any time there's a booming economy and increased tax revenues, it allows negotiators to project smaller losses from tax cuts and more money for government programs," TIME's James Carney notes. "The two sides get closer together without having to do anything." What’s more, the two sides reportedly have nailed down about $22 billion in five-year savings from Medicaid cuts. The chief remaining obstacle, reports Carney, is persuading hardline Democrats led by Minority Leader Richard Gephardt to embrace the plan. "Clinton's probably given up on Gephardt," says Carney. "But if he can get half the Democrats, he's home free."